Sales Tax on Internet Sales

richardp69

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Well, not a total surprise I guess. I know it's coming and likely will soon be a part of every internet sale. I just had a sale to the state of Washington and for the first time Reverb added the sales tax to the sale. They collect it and submit it to Washington so I don't need to do that at least. The sale was for only $700 so it wasn't a back breaker but still adds a significant cost (at least in my opinion) to the total sale. I checked Reverb FAQs and it appears the state of Wash. is the only one (so far) they are collecting sales tax for. I assume we'll see it across the board in time and so will Ebay etc. I'm not sure how they'd ever regulate CL and sites like that but they'll likely find a way.

Might be time for another tea party.
 

walrus

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What a weird coincidence, Richard! I just sold a CD on eBay yesterday to a buyer in the state of Washington and had the same experience. It did not affect me, as eBay takes care of it the payment, but of course it made this particular buyer pay more for the CD than someone else in another state would.

I agree more states will start doing this...

walrus
 

twocorgis

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What a weird coincidence, Richard! I just sold a CD on eBay yesterday to a buyer in the state of Washington and had the same experience. It did not affect me, as eBay takes care of it the payment, but of course it made this particular buyer pay more for the CD than someone else in another state would.

I agree more states will start doing this...

walrus

New York started doing it recently too. Sites like Musician's Friend and Newegg that never used to collect, now do. In some ways it's good, because it levels the playing field. Brick and mortar retail stores, as well as local municipalities, have been pushing for it for a long time.
 

HeyMikey

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Several online sellers are doing this for various States including my own Commieweath of Taxachusetts. I’m not an account and don’t play on on TV, but I believe there is some (yearly?) threshold for each State where once hit the seller is obligated to charge and send tax. Smaller sellers under the threshold do not as far as I know. Which is why on eBay a company like Sweetwater will charge tax but an individual will not (unless they are scamming the system and keeping the extra “tax” amount.)

Note: Reading an above post it seems the individual threshold excemption may have changed recently where eBay is automatically charging the tax for every seller to a certain State. Kind of odd since they always claimed that they were only an intermediary listing service, not the “seller” and therefore not responsible for liabilities. I wonder if this will open a can of worms now wrt to them, Reverb and similar listing companies who used that position to avoid certain claims and suits.
 
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adorshki

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It's inevitable.
Well you know the purpose of government:
To ensure that no tax goes uncollected, and that everything is properly taxed.
In the words of one George Harrison, MBE:
"Declare the pennies on your eyes".

A couple of thing changed recently including a Supreme Curt ruling last June.
From here:
https://www.salestaxinstitute.com/sales_tax_faqs/collect_sales_tax_on_internet_sales
"Internet sales tax obligations can be created in a number of ways. Online retailers should be aware of click-through nexus, affiliate nexus, and economic nexus laws, which establish a retailer’s presence in a state without the retailer’s direct physical presence. Visit our What is Nexus? FAQ to learn more about these types of nexus.
and
"On June 21, 2018, the U.S. Supreme Court issued its decision in South Dakota v. Wayfair, Inc., addressing South Dakota’s economic nexus law. This decision overruled the physical presence rule for sales tax nexus for sales made over the internet. States now have right to require tax collection from online retailers and other remote sellers that do not have physical presence in their states. Looking strictly at the South Dakota economic nexus legislation addressed in the case, South Dakota’s law minimizes the burden on online and out-of-state sellers. The legislation provides a safe harbor for small sellers: a remote seller must make in-state sales exceeding $100,000 or makes 200 or more separate sales transactions in the previous or current calendar year for the nexus provision to apply. The legislation also ensures that the nexus provision does not apply retroactively."
 

Default

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Pa is now billing sales tax directly through the mail. That is temporary and will eventually be lumoed in with the purchase.
 

HeyMikey

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Al
So how does this make ebay or Reverb a nexus retailer if they are not the one selling the item? Why would they be allowed to charge a sales tax for individual sellers who don’t meet the $100k/200 threshold? Seems like a case of CYA because they don’t want to or don’t understand how to manage per the ruling, so are forcing a tax even when not required.
 

GAD

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I have nothing nice to say and my mother always told me to keep quiet when that was the case.
 

adorshki

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Al
So how does this make ebay or Reverb a nexus retailer if they are not the one selling the item?
I'm just speculating, but if they're offering that shipping label/ protection service that Richard mentions here:
http://www.letstalkguild.com/ltg/sh...rb-Shipping-Label-Shipping-Protection-Service
then I suspect that's enough to raise them above the level of a simple listings host.
Additionally, as in eBay's case, if offering buyer/seller protection is facilitating the sale of the item, I think I could make a pretty good case that they've become a broker.
If you hook up a buyer and a seller and charge some type of service fee for it, as both of them do, then you are by definition a broker.
If you're holding somebody's money until a shipment is verified, I think a pretty good case can be made that you're a broker.
Here in CA brokers have to have resale certificates to be exempt from sales tax, and they must collect sales tax from their (buyer) customers or else pay it themselves.
For chattel property, at least.
Don't know about real estate.


Why would they be allowed to charge a sales tax for individual sellers who don’t meet the $100k/200 threshold? Seems like a case of CYA because they don’t want to or don’t understand how to manage per the ruling, so are forcing a tax even when not required.
Don't know, the way I read that article was that it's up to individual sates to decide, but since I don't have any skin in the game I'm not too interested in the ins/outs, I was just saying "yeah, there've been changes, here's some leads if you want to dig deeper".
I imagine that there's a similar process to something in place here in CA for resellers with resale tax exemption certificates: If you paid tax on something you purchased for resale, you claim it back when you pay the state the sales tax you collected.
Apparently all those rules are going to vary by state, note that quote said:
"Looking strictly at the South Dakota economic nexus legislation addressed in the case, South Dakota’s law minimizes the burden on online and out-of-state sellers".
 
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richardp69

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I have nothing nice to say and my mother always told me to keep quiet when that was the case.

That's exactly where I am at. It might well veer into a political discussion which I assume the forum would not like to see. Let's just say I sympathize with the Tea Party folks in Boston back in the day.
 

Grassdog

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There are few things less desirable for a business than a sales tax audit. In some areas, a sales tax auditor has more legal authority than an IRS agent.
 

Guildedagain

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On eBay this morning, on an item from Scranton (there is a lot of Guild stuff in NJ apparently ;-) the tax shows up as "WA Sales tax" which is ok, if that's what it is. At least your state benefits.

Before that, it said "Tax collected for certain tax authorities" or something close to that. Creepy...
 

adorshki

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At least your state benefits.
I agree, and the roads around here are fulla holes, so I've always been ok with it.

Let's continue to avoid going into a political rathole, if possible.

In the spirit of promoting lighthearted equanimity I seem to recall Ben Franklin being cited as saying "Only 2 things in life are certain: death and taxes."
To which I might add we can at least have some hope of finding a cure for death.
 

gjmalcyon

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There are few things less desirable for a business than a sales tax audit. In some areas, a sales tax auditor has more legal authority than an IRS agent.

I co-owned an IT company that started in Philly then moved to NJ. Went through a Commonwealth of PA sales tax audit: Two auditors (based out of Harrisburg, PA), put up in a nice Cherry Hill, NJ hotel for 3 days, a work day for the auditors that started at 10 am and ended at 2 pm (he and she seemed to be a lot more than "colleagues"), and in the end they dinged us for not charging PA sales tax on UPS shipping charges. Fines and penalties were less than $500. All for an audit that must have cost the Commonwealth of PA several thousand dollars.

This happened 15 years ago and I'm still cheesed-off about it.

[Note to mods: If this rant is guilty of promoting political ratholiness, feel free to delete]
 
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adorshki

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In the spirit of promoting lighthearted equanimity I seem to recall Ben Franklin being cited as saying "Only 2 things in life are certain: death and taxes."
To which I might add we can at least have some hope of finding a cure for death.

[Note to mods: If this rant is guilty of promoting political ratholiness, feel free to delete]
In the spirit of promoting light-hearted equanimity, it occurs to me I might not want to be cured of death if it means I still have to pay taxes.
 

GAD

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Political ratholiness is my new favorite phrase.
 

gjmalcyon

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Political ratholiness is my new favorite phrase.


You're welcome. I'll contact you offline for the address for my royalty checks.

I thought it perfectly described all aspects of our present political discourse among and between all political viewpoints.
 
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